Which of the following is not one of the considerations when selecting a business structure?

Business Structure (Ownership) Options

When organizing a new business, one of the first and most important decisions is identifying the structure of the business.  No one choice suits every business. Legal and tax considerations enter into this decision. You have to pick the structure that best meets your needs. It is recommended that you consult with competent legal and tax professionals in order to make an informed decision about what entity type is best for you. 

In Arizona, several business structures exist:

• Sole Proprietorship: The simplest and most common form of business organization is a business that is owned by one individual. The creation of a business as a sole proprietorship requires no formal Arizona filing. Profits and losses are reported on a separate schedule within your personal tax return.
• General Partnership: An association of two or more persons joined together to carry on trade or business for profit. Each partner may contribute skills, money, and/or time, and each shares the company's profits and losses. Earnings are reported at the end of the year with personal tax returns.
• Limited Partnership (LP): An increasingly popular choice for business owners, especially those involved in real estate or other investment ventures. Unlike general partnerships, LPs can limit the liability and the involvement of certain partners. This is useful for attracting investment partners who would like to participate in the profits of the business but not necessarily in its risks or daily operations. LPs are required to register with the Arizona Secretary of State.
• Limited Liability Partnership (LLP) and Limited Liability Limited Partnership (LLLP): Arizona's limited liability partnership statutes govern both limited liability partnerships (LLPs) and limited liability limited partnerships (LLLPs) and permit both general partnerships and limited partnerships to elect limited liability for their general partner(s). The owners report company profits and losses on their personal income tax forms. The business itself is not subject to federal income tax, as corporations are. LLPs and LLLPs are required to register with the Arizona Secretary of State.  
• Limited Liability Company (LLC) and Corporations: Should you decide to create a limited liability company or corporation, you must file with the Arizona Corporation Commission. 
• Limited Liability Company (LLC): A flexible form of enterprise that blends elements of the partnership and corporate structures. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.
• Corporation*: The most complex type of business organization. It is formed by law as a separate entity, completely distinct from those who own it, and has its own rights and responsibilities.
• S Corporation*: Sometimes referred to as a "Subchapter S corporation", allows you the protection of a corporation with some of the financial flexibility of a partnership and elects not to be subject to federal corporation income tax. To qualify for S corporation status, the corporation or other entity eligible to elect to be treated as a corporation must meet certain requirements.
• Non-Profit Corporation*: Arizona allows the formation of a non-profit corporation, but if the corporation intends to be tax-exempt, it must apply for that status through the Internal Revenue Service (IRS). There are more than a dozen types of corporations approved by the IRS as "tax exempt non-profit" These organizations usually are developed and operated exclusively for one or more of the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition (under certain restrictions), or the prevention of cruelty to children or animals. Non-profit corporations are required to file with the Arizona Corporation Commission. 

  Arizona allows the formation of a non-profit corporation through the Arizona Corporation Commission, but if the corporation intends to be tax-exempt, it must apply for that status through the Internal Revenue Service. The Internal Revenue Service Publication 557 - Tax Exempt Status for Your Organization discusses rules and procedures for organizations seeking to obtain recognition of exemption from federal income tax. There are more than a dozen different types of corporations approved by the Internal Revenue Service as tax-exempt "non-profits." These organizations usually are developed and operated exclusively for one or more of the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition (under certain restrictions) or the prevention of cruelty to children or animals. The organization may be a corporation, community chest fund or foundation. A sole proprietorship or partnership will not qualify. (12)

Additional Information:
Arizona Entrepreneur's Edge, Chap 4, Business Structures and Registration: Definitions including advantages and disadvantages of each business structure, also includes a comparison chart of business structures.

Internal Revenue Service (IRS): Business Structures

*S corp, C corp, and 501c3 are all IRS code references. Those designations pertain only to tax status, and are not actually types of corporations. In Arizona, you would simply form either a for-profit corporation or a nonprofit corporation. The corporation’s tax status would later be determined by the IRS and not by the Arizona Corporation Commission (ACC). Please note that the IRS may require specific language in the articles of incorporation to obtain tax-exempt status, and that language is NOT included in the Arizona Corporation Commission forms. You should research the IRS requirements before submitting any documents to the ACC.